Home Warranty and What You Could Learn With One
September 16th, 2008 categories: Buying San Diego Real Estate, San Diego Real Estate, Selling San Diego Real Estate
As a Buyer of property in San Diego, the California Association of REALTORS Standard form provides that you may seek from the seller an agreement to provide Home Warranty coverage on the basic mechanism of the home you are purchasing . While this home warranty should give you some comfort of the the coverage it provides, it is not a panacea for all that is or may go wrong in home.
With the contract that most Buyers don’t read very carefully, there is specific language for the items and issues that warranty does not cover. Your experience with home maintenance and the breakdowns that naturally occur as systems wear out over time might surprise you that many of these are not covered within the scope of your agreement.
Thinking logically about what is not covered ( which you will find in the contract ) and then the reality of facing some of these repairs, you may question the usefulness of the coverage in the first place.
There is excellent reason to have the coverage that either the Seller may provide or that you can provide for yourself if the Seller declines this aspect of your offer to purchase the property. But you should be aware of the the limitations of coverage and the exceptions in the policy as you may face these issues during your ownership.
If your water heater goes out and you have coverage, it will either be repaired or even replaced. Unless that is, the issue is sediment ( calcium or other chemical build up), unless you have specific coverage for that feature. If the issue was caused because it was not property vented, the vented aspect of water heater may not be covered. What does this mean? You probably won’t know until you file a claim and pay the service charge for someone to determine the cause and the remedy. That should sound fair enough. But here is an issue you might not be prepared for. Does any licensed and qualified plumber see the issue exactly the same way? You may be surprised to learn , they do not. Coverage : uncertain.
If you have coverage on your air conditioning system and it fails, it is time to make the call and get someone out to get it fixed. Here are some of the areas where when you purchased the home, you may not have realized what you actually have in the way of the air conditioning system.
For instance, in California, SEER 10, 12 or SEER 13 . What does that mean to you the consumer and did you know to ask?. Did the Contractor that inspected your home go over this with you, did your REALTOR or the Seller mention it? Most Home warranties repair or replace faulty air conditioners to this standard. So what does SEER mean? From a very useful source,ASHI,The American Society of Home Inspectors, here what the SEER means. “Every air conditioning unit is assigned an efficiency rating known as its “seasonal energy efficiency ratio” (SEER). The SEER is defined as the total cooling output (in British thermal units or Btu) provided by the unit during its normal annual usage period divided by its total energy input (in watt-hours) during the same period”.
If the heating or cooling system provided to you in your home is not of the property capacity for the size of the home and it breaks down, there is an exclusion in many home warranties that may specifically decline coverage to repairing or replacing an inadequately sized system should it break down.
The point is that as a Buyer today, you need to know to ask more questions. Assuming you already know or don’t need to know those answers about a home may actually cause your real learning experience to be deferred until something breaks down.
Construction standards today provide that if a home was built to code, the components of the home meet the minimum standards for functionality and safety. So while the home functions and is safe, you still must expect that things will break down as most components of a home have a useful life term. When the useful life of the components in your home start breaking down from either wear or just being old and giving out, the Home warranty can step in and help you out with the expense.
But it has limits and these limits should be understood. As a buyer for a residential property, I would guess there could be no better way to understand the components of your home than reading carefully a home warranty plan and then asking lots of questions. With every qualified answer, you will be getting a real education about the home you are soon to own.
One very smart way to do this is be sure to have a home warranty plan in your offer to purchase. Get a copy of what the coverage is and read it carefully, making special note of the exceptions. When you have your contractors inspection, this is a great time to compare the available coverage and understand what is going to covered and what is not. You might even want to upgrade that home warranty policy yourself adding other components that you discover when doing the contractors inspection.
You might wonder why there are exclusions for instance on covered items. This is insurance and not unlike medical coverage, there are exceptions or circumstances that are either excluded or qualified based on criteria from the insurance coverage. When you better understand the components of the coverage, you better understand the components and any exceptions, in this case of your home.
Learning is a logical process and requires usually starting from some elementary point and building on that point. Getting more and more knowledge as you go. The biggest mistake any buyer can make is to assume you already know something just by looking at it , when you have a perfect opportunity to put aside what you think you know and learn the elements of your home from the ground up. You can never know to much and starting with your contractors inspection and a good home warranty with the proper coverage of what you are buying will go a very long way to providing you and your family the best living experience in your new home.
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